Today is Washington’s Birthday or Presidents Day, either way its a Federal holiday and most oil markets are closed. This maybe partly to do with the rally on Friday which cant be put down to fundamentals but short closing and avoiding leaving positions open for a long weekend it might. To put things into perspective, WTI rose by 12.31% on Friday which was the best one day move since February 2009 but still left the contract down 4.7% on the week.
There was a bit of further discussion about Opec cutting, following on from the UAE call I mentioned on Friday the Nigerian oil Minister said that ‘there was a growing consensus that a decision must be reached to end the global price rout’. All very well but no cigar, at least for the time being. This is especially true since Iran are pumping up the volume with shipments galore leaving port and ministers claiming that they are producing 1.3m b/d now and by the Iranian New Year, March 20th, will be up to 1.5m b/d. Their oil is now firmly priced to compete with that of Saudi Aramco, hardly compatible with ‘forgetting the past and having a new narrative’…
The Baker Hughes rig count offered more solace on Friday, overall the number was down 30 units to 541, with oil down 28 to 439, more than 600 rigs off last years peak.
More good news from Sound who have announced this morning that the ground works have started at their Tendrara licence onshore Morocco. All contracts have been awarded for the first well and that means that construction of the camp and two pads will be underway shortly. Sound has negotiated a fine deal with Schlumberger who will pay for 80% of the capex of this well estimated to be £9.2m for 100%, the well is 2.4km north east of the successful TE% well. CEO James Parsons hopes that this well can ‘secure commercial flow rates’ on the licence area and prove up significant volumes in an area that is attracting interest across the sector.
Egdon Resources/Union Jack
Egdon has announced that it has spudded the Laughton-1 well on PEDL 209 in Lincolnshire. Union Jack part carries Egdon here paying 16.67% of the costs for a 10% interest. The primary target is the Silkstone rock and two other reservoirs.
This morning Shell completed the acquisition of BG, something a number of industry commentators have said would never happen. A number of these commentators are also those that have been saying that Shell will cut the dividend, also unlikely in view of recent comments. I read a couple of articles at the weekend suggesting that Shell will find it difficult to make the asset sales promised but I’m not so sure over the three year required period that will be out of the question.
I am reminded that last week I failed to comment on the spudding by SOCO of the Baobab Marine-1 well offshore the Republic of Congo. Indeed this did slip through the net but it will be an important well given its size and potential.
England lost the one day series against South Africa after going into a 2-0 lead then going down 2-3 losing three on the trot. We love the carefree batting and stroke play at all times but maybe just a smidgen of common sense could be applied just once in a while?
In the 6 nations the Scots have another official to get cross with as the opening try by Wales was offside and not spotted by the TMO who was concentrating on other things. Wales went on to win by 4 points….The French may have a new side but are showing some character by beating Ireland, defending champions, whilst England, after a faltering start did indeed make Italy suffer if with some good fortune…
The football was a tale of two cities, London, indeed North London, had it away as both the Gooners and Spurs got wins at the expense of the Foxes and the Noisy Neighbours whilst United lost as well. That created highs and lows in the North East as the Maccams victory was made worse in Newcastle with the Magpies leaking 5 at Chelski. The top and bottom of the table is now most interesting, with 12 games to go the game is definitely on but maybe not for Villa who shipped 6 against the HubCap Stealers, all different scorers…
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